INTERIM PROVISIONS ON FIXED ASSETS INVESTMENT DIRECTION REGULATING TAX

(Promulgated by Decree No. 82 of the State Council of the People's Republic of China on April 16, 1991)

Article 1 With a view to carrying out state industrial policies, controlling investment scope, guiding investmentdirection, regulating investment structure, strengthening key constructions, and promoting sustained, stable andcoordinated development of national economy, the present Provisions are formulated.

Article 2 All units and individuals who are engaged in investment in fixed assets within the territory of the People'sRepublic of China are obligated taxpayers (hereinafter referred to as taxpayers) of fixed assets investment directionregulating tax (hereinafter abbreviated to FAID regulating tax) and shall pay FAID regulating tax in accordance withstipulations of the present Provisions.

Article 3 Different tax rates shall be applied to FAID regulating tax according to state industrial policy and economicscale of project. Fixed assets investment projects shall have applicable tax rates determined in the light of scale ofproject unit. Taxable items and tax rates shall be applied according to the FAID Regulating Tax Schedule of TaxableItems and Tax Rates attached to the present Provisions.

Fixed assets investment (except investment in replacements and technical innovations) that are not listed in theSchedule of Taxable Items and Tax Rates shall be subject to a tax rate of 15%.

Investment in replacements and technical innovations other than those listed within the category of 0% according tothe Schedule of Taxable Items and Tax Rates shall be subject to a tax rate of 10%.

FAID Regulating Tax Schedule of Taxable Items and Tax Rates may be revised by the State Council when it sodecides.

Article 4 Calculation of payable FAID regulating tax shall be based on actually realized amount of investment in afixed assets investment project and in case of replacements and technical innovation projects the calculation shall bebased on actually realized amount of investment in construction project.

Article 5 FAID regulating tax upon a fixed assets investment project shall be paid in a year's advance based onannual investment budget for each project unit. At the end of the year, tax accounts shall be squared on the basis ofactually realized investment amount with excessive payment of tax refunded or tax due repaid. Upon completion of thewhole project, the tax accounts shall be cleared on the basis of actually realized total investment amount with excessive payment of tax refunded or tax due repaid.

Any taxpayer who really has difficulty in fully paying in advance tax upon the whole year's budgeted investment may,subject to examination and approval of the tax authority, pay by installments the total amount by the end of Septemberof the very year.

Article 6 When a taxpayer applies for approval of a fixed assets investment project the taxpayer shall make sure thatpayment for FAID regulating tax has been effectively arranged for. FAID regulating tax shall be included in totalinvestment budget and covered by economic and financial assessment of the project. But tax payment may not be takeninto account when payment for design, construction or other fees are charged.

Article 7 FAID regulating tax may not be reduced or exempted except otherwise prescribed by the State Council.

Article 8 FAID regulating tax shall be collected and administered by the tax authority. Taxpayers shall go throughprocedures of tax registration, tax authentication and tax declaration with the tax bureau of the locality where the projectis sited.

Article 9 Collection of FAID regulating tax shall be brought under a source control mechanism that combines plannedunified management with an investment license system as is detailed in the following:

(1) Planning commissions or planning and economic commissions of different provinces, autonomous regions,municipalities under the direct leadership of the Central Government and of separate-planning municipalities shall gettogether written project programmes on fixed assets investments in respective locality and transmit to lower levelstaxable items, tax rates and tax amount to be applied to different fixed assets investment projects subject toexamination and decision of the tax authority at the same level.

(2) Taxpayers shall go to the tax bureau of the locality where the project is sited to go through procedures of taxregistration and declaration etc. before they begin injecting annual investment. Banks and other financial institutionsshall transfer the amount of tax upon presentation of the special tax payment notice paper issued by the tax authority.

(3) Planning commissions or planning and economic commissions shall issue the investment permit uponpresentation of the receipt of tax payment. Banks and other financial institutions shall proceed with allotment of funds orloans to fixed assets investment projects upon presentation of the investment permit.

Article 10 Payment for FAID regulating tax shall be withheld and transferred by the Chinese People's ConstructionBank, the China Industrial and Commercial Bank, the China Agricultural Bank, the Bank of China, the Transportation Bank and other financial institutions or relevant units.

Article 11 For fixed assets investment projects beyond planning, the taxpayers may, in addition to payment of tax atapplicable tax rates, be imposed on by the tax authority a fine as much as less than five times amount of tax that should be paid. But fixed assets investments beyond planning that are listed within the category of 0% tax rate shall behandled by relevant planning departments according to correspondent stipulations.

Investments in capital construction conducted under the pretext of replacements and renovations projects shall beimposed upon double amount of tax payable according to taxable items and tax rates applied to capital constructioninvestments. But capital construction investments that are listed within the category of 0% tax rate shall be handled byrelevant planning departments according to corresponding stipulations.

Article 12 In case a taxpayer fails to pay tax according to the present Provisions, planning commissions or planningand economic commissions shall cancel establishment of the project if it is at preparatory stage, or shall withholdarrangement for construction of the project if it has just been ready for construction, or shall cancel the annualinvestment budget if it is at the stage of continued construction and, additionally, shall revoke the investment permit.Banks and other financial institutions shall withhold from loaning or allotting funds to such project.

In case planning departments or banks violate the present Provisions to the consequence of tax evasion, relevantauthorities at higher level shall investigate into responsibilities of concerned offenders.

Article 13 Other matters over management of collection of FAID regulating tax shall be handled according tostipulations of the Interim Provisions of the People's Republic of China on Management of Tax Collection.

Article 14 The present Provisions are not applicable to investments in fixed assets by Sino-foreign equity jointventures, Sino-foreign cooperative enterprises or solely foreign funded enterprises.

The present Provisions are not applicable to investments in development items banned by the state. Suchinvestments cases shall be separately handled by planning departments according to corresponding state laws,regulations, guidelines and policies. Schedule of State Banned Development Items may be revised by the State Councilwhen it so decides.

Article 15 Preferential treatment with FAID regulating tax to be applied to regions of minor nationalities shall beprovided for separately.

Procedures on collection, reduction and exemption of FAID regulating tax upon fixed assets investments with lessthan 50,000 yuan that, according to state regulations, fall beyond planned management, shall be decided by people'sgovernments of provinces, autonomous regions and municipalities under the direct leadership of the CentralGovernment.

Article 16 Fixed assets investment permits shall be issued and managed in a unified manner by planningdepartments. Rules on permit management shall be formulated by the State Planning Commission.

Article 17 Interpretation of the present Provision shall be in the responsibility of the State Tax Bureau. Detailed rulesfor implementation may be formulated by the State Tax Bureau.

Article 18 The present Provisions shall come into effect as of the year 1991. The Interim Provisions of the People'sRepublic of China on Construction Tax which was promulgated by the State Council on June 25, 1987 shall be annulledever since the same year.

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Appendix I FAID Regulating Tax Schedule of Taxable Items and Tax RatesCategories Taxable Items Tax Rates

(Investment projects)

1. Agriculture, Projects for control of big and small rivers 0%Forestry and including flood prevention project,dam, Water Conservancy floodgate, flood storage and control reservoir, flood-control dam,  flood-diversion project, river realignment, danger reservoir reinforcement, flood-control communication equipment; Projects for irrigation and drainage including 0% water storage, water diversion, water up-pumping, water discharge, water allotment, water saving, water drainage and flood-discharge; Farmland and water conservancy, water and soil 0% conservancy; Improvement of medium- and high-yield 0% cultivated land; Development of beaches and wasteland; 0% Breeding of fine seeds and varieties; 0% Stations of technical services in animal 0% husbandry, livestock medical science, acquatic products, agricultural machines and water conservancy; Poultry and livestock farm; 0% Construction of fishing port and fishery base 0% (except for those that occupy arable land); Deep-sea fishery and purchase of fishing boat; 0% Acquaculture (except for where arable land is 0% occupied); Spreading of agricultural, forestry and water 0% conservancy technologies; Commodity base of grain, cotton and edible oil; 0% Monitor, authentication and technical 0% supervision of agricultural machinery; Supplementary and compound forages; 0% Base of fine agricultural and side-line 0% products; Forage monitoring and testing station; 0% Fertilizer, chemicals and animal medicines 0% monitoring and testing station; Shelter-forest project; 0% Construction of nature preserves; 0% Forestry protection; 0% Construction of quick-grown high-yield forest; 0% Construction of bases for protection and 0% raising of wild animals; Well-known, excellent and special economic 0% forests; Plantation of Chinese medical herbs; 0% Cultivation of forests of middle age and 0% young growth; Cultivation of forestry seedlings; 0% Afforestation and forestry resource reclamation 0% projects; Animal and plant quarantine; 0% Construction of grazing land; 0% Construction of meteorological and hydrological 0% installments; Water diversion and water supply projects; 0% Protection of water resources and resettlements 0% of residents in the zone of reservoir.

2. Energy Industry

Coal Coal mining (except for small coalpits without 0% construction license); Exploitation of coal gas; 0% Exploitation and utilization of low calorie 0% fuels; Mechanized exploitation and dressing of coking 0% coal with a capacity of 200,000 tons and above;

Mechanized exploitation of coking coal with 30% a capacity of lower than 200,000 tons.

Electricity Thermal power generating unit, nuclear power, 0% projects of big, medium and small hydropower station, thermoelectric joint-generating and energy-saving set, power transmission and transformation projects with a capacity of 100,000 kilowatts and above;

Thermal power or steam-condensing generating 5% set with a capacity ranging from 25,000 kilowatts to 100,000 kilowatts within a power supply network zone;

Fuel-electric set (including diesel-electric 30% set and gas-electric set).

Nuclear Energy Nuclear energy, new energy sources 0% (terrestrial heat, wind power, tidal power and solar energy)

Petroleum Projects of exploration and exploitation of 0% petroleum, natural gas;

Exploitation of oil shale; 0%

Maintenance of petroleum and natural gas fields; 0%

Projects for storage, transport and processing 0% of petroleum and natural gas.

3. Communications, Transportation and Posts, Telecommunications

Railway Projects for construction or expansion of 0% railway lines, railway hubs or passenger-cargo railway stations or stops;

Purchase of new locomotives, cars and 0% railway-transportation specific equipment and maintenance of locomotives and cars;

Manufacture of locomotives and cars. 5%

Communications Construction and expansion of coastal or inland 0% river ports, navigation lanes, ship locks, high-ways and passenger-cargo stations and yards;

Communicative facilities specific to 0% communications;

Communicative navigation and navigation marks; 0%

Facilities for reparation of boats; 0%

Salvage; 0%

Safety monitor; 0%

High way and navigational administration 0% projects;

Boats testing; 0%

Purchase and fixation of automobiles, boats, 0% machinery for construction or maintenance of roads, harbour machinery and diving equipment.

Posts and Posts and telecommunications construction 0%Telecommunications (including posts andtelecommunications);

Purchase of vehicles and boats specifically 0% used for posts or telecommunications.

Civil Aviation Purchase of equipment for airports, 0% communicative navigation facilities and planes and purchase of equipment for maintenance of planes, fuel supply, public security and fire fighting facilities, testing equipment and vehicles for special uses;

Ticket office for civil aviation, cargo 0% transport station and computer system;

Navigation control facilities (including 0% aerial communication control facilities concerning communication, navigation guidance and meteorological affairs).

4. Raw and Processed Materials, Geological Survey, Medicine

Iron and Steel Mining and dressing of iron, chromium 0% manganese ores;

Sintering and coking of blast furnace of 600 0% cubic meters and above and of necessary accessories;

Sintering and coking of blast furnace ranging 5% from 300 to 600 cubic meters (including 300 cubic meters) and of necessary accessories;

Sintering and coking of blast furnace of 100 30% cubic meters and below and of necessary accessories;

Converter and electric furnace of 30 tons and 0% above and necessarily accessory casting machine;

Converter and electric furnace ranging from 15 5% to 30 tons (including 15 tons);

Converter of less than 10 tons; 30%

Electric furnace of less than 5 tons; 30%

New refractory materials; 0%

Common refractory materials; 5%

Welding tubes of 100 millimeter and below, 30% seamless tube rolling mills of less than 76 millimeter, common steal cogging mills, and blank rolling mills;

Large and medium sized rolling steal; 0%

Large sized iron alloy (except silicon iron 0% and manganese steal of blast furnace;

Sintering machine of 90 square meters and above; 0%

Silicon iron ranging from 1,800 to 6,000 30% kilovolt-ampere (except those utilizing seasonal hydraulic power);

Various kinds of carbon products; 0%

Smelting of lead or zinc of 20,000 tons and 30% below, smelting and electrolysis of copper, smelting of wolfram, tin and antimony.

Nonferrous Mining and dressing of nonferrous metal (heavy 0% nonferrous metal, light nonferrous metal, precious metal, rare metal, rare-earth metal) ores;

Separated smelting and sophisticated processing 5% of rare-earth metal within state planning;

Superconductive materials; 30%

Electrolysis of aluminium with a capacity of 0% 50,000 tons and above;

Large and medium sized smelting of nonferrous 0% metal;

Large and medium sized project for production 0% of nonferrous metal plate, strip and foil.

Chemical Mining and dressing of large and medium sized 0%Industry (Including chemical minerals such assulphide iron, Petrochemical phosphorus, potassium, boron, natural soda, Industry) natural mirabilite,natural nitre, natural alumstone;

Pure soda project of over 600,000 tons; 0%

Carbon project of 50,000 tons and above, and 0% necessary accessories;

Rubber products specified by the state for 0% specific use of birth control;

Reclamation and reprocessing of waste and 0% used rubber;

Highly effective, low toxicant and low remain 0% farm chemical, half-finished chemical and chemical intermediate;

Large and medium scale project of synthetic 0% ammonia, nitrogenous fertilizer, phosphate fertilizer, potash fertilizer, compound fertilizer, small sized project of potash fertilizer;

Large and medium scale project of basic 0% chemical industrial raw materials (including inorganic and organic raw materials);

Feed additives in fine chemical industry; 0%

Raw petroleum processing project of 5,000,000 0% tons and above;

Ethylene project with a capacity of 300,000 0% tons and above;

Polythene synthetic resin project of 60,000 0% tons and above;

Large and medium scale other synthetic resin 0% and engineering plastics project;

Special rubber and large and medium scale 0% synthetic rubber project;

Caustic soda project of 10,000 to 50,000 tons 5% (excluding 10,000 tons);

Pure soda project ranging from 180,000 tons 5% to 600,000 tons;

Titanium white powder of 15,000 tons and above; 5%

Energy-saving calcium carbide project of over 5% 45,000 tons;

Catalyst; 5% chemical promoter; 5%

Large and medium scale project of fine chemical 5% product: meridian tire (batch production of high-capacity tire of 100,000 sets and above, batch production of light-truck tire or passenger vehicle tire of 300,000 sets and above);

Small scale project for production of 5% synthetic ammonia fertilizer, nitrogenous fertilizer and phosphate fertilizer;

Carbon black project based on new technology 5% with a capacity of 10,000 tons and above;

Processing of crude oil with a capacity 5% ranging from 2,500,000 to 5,000,000 tons;

Ethylene processing project with crude 5% hydrocarbon as raw material and a processing capacity of 100,000 tons and above;

Common rubber products for daily use; 30%

Calcium carbide production with a capacity 30% ranging from 10,000 to 45,000 tons (excluding calcium carbide produced with seasonal water and electricity);

Rubber processing (including tire, 30% high-capacity tire, common pipes, boards, bands, rubber wearshoes, rubber products for daily use);

Some kinds of lacquer (including oil paint, 30% natural lacquer type organic coating, bakelite lacquer, asphalt lacquer, diluent);

Some kinds of dyestuff (including sulphur 30% dyes, reductant blue);

Sensitive materials and magnetic recording 30% materials (including assembly line of low-class cassette recording and video tapes and soft magnetic discs);

Oxalic acid processing with a capacity of 30% 1,000 tons and below;

Crude oil processing project with a capacity 30% ranging from 1,000,000 to 2,500,000 tons (including 1,000,000 tons) (except for where such project is approved by the state to be sited in border, remote or economically underdeveloped provinces and regions);

Polythene synthetic resin project with a 30% capacity of less than 30,000 tons.

Building Exploitation and procession of nonmetal 0%Materials minerals;

Facilities for loading, unloading, storage 0% and transportation of bulk cement;

Cement project with a productive capacity of 0% 600,000 tons and above;

Nonmetal products; 5%

Inorganic nonmetal new materials; 5%

Cement project with a productive capacity 5% ranging from 300,000 (including 300,000) to 600,000 tons;

Special cement; 5%

Cement pressure pipes; 5%

Cement sleepers; 5%

Cement wire poles; 5%

Cement trestles for ore mining; 5%

Fufa glass project with a productive capacity 5% of 2,500,000 and above weight boxes;

Sanitary ceramics project with a productive 5% capacity of 360,000 pieces and above;

Glazed tiles project with a capacity of 5% 700,000 square meters and above;

Products made of granite, marble; 30%

Plastic door and window frames, plastic 30% wallpaper, floor board;

Small cement project with a productive 30% capacity ranging from 20,000 to 80,000 tons (excluding 20,000 tons);

Assembly line for production of rock wool; 30%

Rice-straw board; 30%

Glass fibre project with a productive capacity 30% of 1,800 tons and below;

Solid clay bricks that damage farm land; 30%

Hollow clay bricks; 0%

New walling materials, new roofing materials; 0%

Building materials made of waste industrial 0% residues;

New fire-proof raw materials. 0%

Medicine New anticancer medicine; 0%

Biochemical medicine; 0%

Vaccine for animals; 0%

Chemical raw medicals and intermediates; 0%

Projects for processing of prepared Chinese 5% medicine;

Biological products; 5%

Pharmaceutical machinery; 5%

Anti-senility tonics; 30%

Pharmaceutical preparations (except those that 30% have been up to GMP criteria);

Large X-ray machine and CT instrument; 0%

Chinese medical materials, Chinese medical 0% capsules;

Contraceptive medicines and devices under 0% state planning.

Timber Industry Forest industry; 0%

Construction of timber processing base; 0%

Project for processing of man-made broad 5% including compressed board project with a capacity of over 15,000 cubic metres, fiberboard project with a processing capacity of over 5000 tons, veneer board project with a capacity of over 10,000 cubic metres, chemical industry of forestry products;

Veneer board project with a capacity of 10,000 30% cubic metres and below;

Compressed board project with a capacity of 30% 15,000 cubic metres and below;

Fiberboard project with a capacity of 5,000 30% cubic metres and below.

Geology Geological prospecting and survey. 0%

5. Machinery and Electronic Industry

Machinery Thermal power generating facility and major 0% accessories with each turbine generating

200,000 kilowatts and above;

Hydropower generating facility, nuclear power 0% generating facility;

Electric transmission and transformation 0% equipment set with a capacity of 110 kilo-volts and above;

Specialized mould production for trades; 0%

Special purpose heavy mine facilities; 0%

Reparation and manufacture of civil aircraft; 0%

Facilities for manufacture of ships of 35,000 0% tonnage and above;

Facilities for special use of lifting and 5% transportation;

State appointed special facilities for casting, 5%

forging, electroplating and heat-treatment;

Petrochemical equipment; 5%

Precision instruments and meters; 5%

Special-shaped precision hydraulic pneumatic 5%

sealing devices;

Special-shaped precision bearings for special 5%

use;

Precision and numerical controlled machine 5%

tools and necessary accessory cutting tools,

measuring tools, measuring instruments and

equipment;

Medical apparatus and instruments; 5%

Postal and telecommunication equipment; 5%

Manufacturing facilities for civil boats and 5%

ships raging from 5,000 to 35,000 tonnage;

Large-sized combines; 5%

High-tensile, special-shaped powder metallurgy 5%

products;

Mechanical products beyond scope of trade and 30%

planning;

Road rollers and industrial boilers; 30%

Special purpose equipment such as pouring jars; 30%

Small transformers, common electric wires and 30%

cables, general alternating current electric

machinery and divisional horsepower electric

machinery, electric appliances like

high-voltage and low-voltage switch cupboards;

General machines tools, general bearings, 30%

general basic components and products,

general-purpose instruments and meters;

Berth of less than 5,000 tonnage. 30%

Electronics State designated massive integrated circuit 0%

and special-purpose circuit;

State designated large and medium sized 0%

computers and expensive equipment;

Massive communication and navigation 0%

installments;

Development and production of softwares of 0%

electronic computers;

Massive precision measuring and monitoring 5%

systems;

Technological instruments for special use in 5%

electronics and special-purpose materials;

Micro-electronic technical instruments; 5%

Small and miniature computers and exterior 5%

equipment, newly developed special-purpose

electronic elements and components;

State designated colour kinescope, glass case 5%

and accessory elements and components;

Integrated circuit and special-purpose circuit 30%

projects not designated by the state;

Computer and exterior equipment project not 30%

designated by the state;

Household electronic appliances. 30%

6. Automobile Heavy trucks designated by the state; 0%Industry

Key truck components within planning of trade; 0%

Light trucks designated by the state; 5%

Cars designated by the state; 5%

Refitted automobiles, jeeps and motor-cycles 30% within planning of trade;

Automobile components and spare parts beyond 30% planning of trade;

7. National Defence Industry and Research for National Defence

Military industrial products that directly 0% serve the purpose of national defence and accessory products for the special purpose of national defence;

8. Light and Textile Industry

Light Industry Salt extraction (including sea salt, lake 0% salt, well salt, mineral salt);

Sugar refinement project (with daily refining 0% capacity of 1,000 tons and above);

Paper pulp project (with an annul production 0%

capacity in commodity paper pulp maceration

of 50,000 tons and above);

Synthetic lipase project with a capacity of 0%

50,000 tons and above;

Alkylamine benzene project with a capacity of 0%

70,000 tons and above;

Tripoly-sodium phosphate project with a 0%

capacity of 30,000 tons and above;

Non-ionic surface active agents project with a 0%

capacity of 15,000 tons and above;

Sugar refinement project (with daily sugar 5%

crop processing capacity ranging from 500 to

1,000 tons);

Paper pulp and paper project with a maceration 5%

capacity ranging from 10,000 to 50,000 tons;

Grain processing and oil extraction including 5%

rice mill and vegetable oil extraction;

Raw materials for synthetic detergents; 5%

Large and medium scale project for daily use 5%

ceramics;

Plastics products, polyester containers, iron 30%

sheet toys, thermos;

Leather and leather products; 30%

Wooden pencils, washing powder project with a 30%

capacity of less than 30,000 tons, soap

project with a productive capacity of less

than 15,000 tons, fragrant soap project

with a productive capacity of less than

3,000 tons, liquid detergent project with a

productive capacity of less than 5,000 tons,

tri-poly-sodium phosphate project with a

capacity of less than 10,000 tons, steelyard,

mechanical counter-scale, platform scale,

underground weighing apparatus, measuring

levers;

Sugar refinement project with daily refining 30%

capacity of less than 500 tons;

Beverage project with a productive capacity 30%

of 300 tons and below;

Canned food project with a productive capacity 30%

of 1,000 tons and below;

Gourmet powder project with a productive 30%

capacity of 1,000 tons and below;

Photographic paper (except domestically made 30%

sensitive paper);

White spirit and beer. 30%

Textile Polyester slices project with a processing 0%

capacity of 60,000 tons and above;

Large and medium scale project of synthetic 5%

fiber and raw materials;

Large and medium scale project of viscose 5%

fiber, serosa, pure chemical fabric and

silk fabric;

Export intended (70& export rate realized) 5%

textile silk, printing and dyeing of

textiles and clothing;

Ramie and flax processing, processing of 5%

hair of rabbits and other special animals;

Para-benzene formic acid project with a 0%

capacity of 225,000 tons and above;

Cast ammonium and nylon 66 salt project with a 0%

processing capacity of 50,000 tons and above;

Acrylonitrile and acrylic fiber project with a 0%

processing capacity of 50,000 tons and above;

Wool textile, cotton textile, weaving silk and 30%

natural silk;

common man-made leather, polypropylene fiber, 30%

long polyester fiber silk and chemical fiber

carpet;

Adhesive-bonded fabric; 30%

Acetic acid elements and silks. 5%

Tobacco Tobacco leaf flue-curing project with a 30%

processing capacity of less than 7,500 tons.9. Science Scientific work office buildings; 0%

State scientific and technological key 0%

projects and hi-tech key projects;

Intermediate experiments, industrial 0%

experiment and open laboratories.10. Culture, Education, Health, Broadcasting, Physical Culture, News and Publications

Teaching and learning facilities; 0%

Rehearsing and dance practising rooms of 0%

professional troupes;

Cultural centres, mass art galleries, 0%

libraries, archives, cultural relics

preservation facilities, publications

distribution facilities that are of

comparable scale with local civil

residential buildings;

Museums, state-designated printing houses for 5%

books, newspapers and journals,

state-designated publishing houses,

newspaper agencies and magazine offices

which are of comparable scale with local

civil residential buildings;

Feature film studios; 30%

Disc cutting plants; 30%

Television stations at city or county level 30%

who make programmes by themselves;

Printing houses for books, newspapers and 30%

magazines and other printing houses,

publishing houses, newspaper agencies and

magazine offices that are not designated by

state;

Health and anti-epidemic and quarantine 0%

facilities;

Health care of women and children; 0%

Broadcasting stations and transmission and 0%

relay systems of municipalities under direct

leadership of provincial government or of

higher level;

Television stations and transmission and relay 0%

systems at provincial level and above;

Newsreel, children, scientific, educational and 0%

art film studios;

Facilities for the purpose of birth control; 0%

Small scale stadiums or gymnasiums and 0%

athletes training rooms.

11. Commerce, Supply and Marketing of Goods and Commodities

Port facilities for commodity inspection, 0%

customs and border defence;

Processing of waste and used goods and 0%

materials;

Processing of grain, cotton and oil extraction 5%

(flour mill, rice mill, oil press, pickled

vegetables, soy sauce, vinegar);

Processing of food grain (fine dried noodles, 5%

half-cooked noodles);

Comprehensive soybean and corn processing plants;5%

Basic catering and service networks 5%

(bathrooms, reparation networks, catering 5%

restaurants, shops etc.);

Food processing (sweets, biscuits, chocolates). 30%

12. Urban Construction

Urban facilities for water supply, water 0%

drainage and saving on water;

Urban gas facilities; 0%

Concentrated heat-supply facilities; 0%

Waste water treatment plants; 0%

Urban roads and bridges (including crossroad 0%

bridges);

Subway; 0%

Public communication; 0%

Garbage disposal plants, garbage discharge 0%

stations;

Urban gardening and green land pieces; 0%

Luxurious buildings and constructions subject 30%

to approval by competent authorities.

13. Miscellaneous

Earthquake Construction of seismograph stations and 0%

office building of earthquake research

institutions.

Oceanology Oceanographic survey and monitor facilities 0%

and office buildings, office buildings and

facilities of other research institutions.

Survey and Facilities for survey and map drawing. 0%Drawing

Technical Technical supervisory stations. 0%Supervision

Civil Affairs Preferential-aid and social welfare 0%

facilities, social welfare plants (excluding

industries and products restrained by the

state).

Tourism Preservation of scenic spots, road 0%

construction, water, power and communication

facilities within sightseeing zones.

Public Security Lockup house, collecting posts, detention 0%

house, public security technical operation

house, fire-control facilities.

Justice of Law Prison and guarding facilities. 0%

National Security affairs and technical operation 0%Security offices.

Procuratorial Facilities for procuratorial work including 0%Work offices for reconnaissance work and

technical operation, pre-trial room,

detention room.

Court Tribunals. 0%

Military Military constructions, military suppliers, 0%

maintenance of weaponry equipment.

Air Defence Air defence constructions. 0%

14. Multi-funtional Projects

(1) Projects for pollution control, 0%

environmental protection and saving on

energy;

(2) Projects for recovery construction after 0%

natural calamity;

(3) Investments of donations from foreign 0%

governments or other foreign donors;

(4) Private residence in cities and 0%

countryside, residence of living base for

geological workers doing field work,

residences of teachers and teaching staff

and students' dormitories in different

schools, residence in research institutions

and colleges, energy-saving residences in

northern regions of China(*);

Common civil residential buildings 5%

(including commercial residential buildings);

Villa-style residence each with separate 30%

entrance and courtyard;

(5) Exclusive purchase of equipment; 0%

(6) Comprehensive utilization of resources 0%

(exploitation of the "three wastes" and

associated minerals, electricity generation

and utilization of different gas turbines

that can set off associated gas);

(7) Storing facilities (storehouse of grain, 0%

cotton, oil and petroleum, commercial

depositories, refrigerator house, state or

local goods and materials depositories,

commercial and supply-and-marketing storing

facilities, fruits storehouses.(*)NOTES:

"Energy-saving residences in northern regions of China" refer to residential buildings in northern heat-supplieddistricts of China which have been up to standards prescribed in the Energy-saving Design Standards for CivilConstructions jointly promulgated, through No. 514 Urban Construction Document (87), by the Ministry of Construction,the State Planning Commission, the State Economic Commission and the State Building Materials Bureau.REMARKS:

1. Trades listed in the present Schedule are based on the division of the national economy. They are not consistentwith administrative departments;

2. Taxable items and tax rates shall be calculated on the basis of a unit project of fixed assets investment;

3. All replacements and technical innovation projects that fall out of the category of 0% rate shall be taxed on the basis of construction items covered by relevant project at a tax rate of 10%;

4. All fixed assets investment projects other than those listed in the present Schedule and those defined asreplacements and technical innovation projects shall be taxed at a tax rate of 15%.

5. Projects banned by the state may not be subject to the control of taxation but shall be brought under separateregulating mechanism, see the enclosed Schedule of Development Projects Banned by the State;

6. Productive capability refers to annual productive capability except where particular reference is specified.

APPENDIX II Schedule of Development Projects Banned by the State

Trades Projects Banned by the State1. Agriculture, Acquatic farming and fruits planting that occupy cropland.Forestry and Water Conservancy

2. Energy Industry

Coal Coal mining without license.

Electricity Steam condensed coal-burning electric set with each

turbine having a generating capacity of less than

25,000 kilowatts (except for investment in places

though having coal deposit but not being able to have

the coal transferred outside and having no access to

electricity);

All kinds of small diesel-electric sets.

3. Raw Materials, Geology, Medicine

Steel and Iron Mining of ferrous metal minerals without license;

Poorly equipped bi-roller mill;

Coking and sintering by indigenous methods;

Ferroalloy processing with electricity of 1,800

kilovolt-amperes and below (except where seasonal

water and power is used);

Sintering machine on a scale of 18 square metres and below;

All kinds of light steel rolling mills that do not have regular supply of billet.

Nonferrous Small-scale gold ore dressing by indigenous methods and small-scale gold extraction by cyanidation;

Copper and aluminum processing beyond state planning;

Electrolytic aluminum project (to be constructed or

expanded anew) with a processing capacity under 50,000 tons;

Mining of nonferrous, gold or rare-earth ores without license;

Project of magnesium smelting or industrial pure silicon processing with a capacity of 3,000 tons or below;

Alloy aluminum door and window frames or other fixtures for construction use, copper or aluminum furniture and ornaments;

Rare-earth separation beyond state planning.

Chemical Synthetic resin equipment for polyvinyl chloride, Industry ployethylene or styrene with aprocessing capacity of Including 6,000 tons and below;Petrochemical Industry Chemical reagents ofgeneral use;

General ion exchange resin;

Acetylene acetic acid;

Non-saturation polyester resin;

PS plates;

Project for electrolytic hydrogen peroxide solution and

anthracene quinone hydrogen peroxide solution with a

capacity of 3,500 tons and below;

Dyeing stuff investment with a capacity of 500 tons and

below;

Lacquer project of 5,000 tons and below (including oil

lacquer, lacquer type organic coating, bakelite

lacquer, asphalt lacquer);

Calcium carbide of 10,000 tons and below (except for seasonal production of calcium carbide);

Production of titanium white powder through sulphuric acid method with a capacity of 3,500 tons and below;

Non-water hydrogen-fluoride project of 2,500 tons and below;

Plexiglass production through cyanidation;

Red vanadium sodium project of 7,000 tons and below;

Citric acid of 1,000 tons and below;

Production of used-only-once injection tools beyond trade's planning;

Carbon black of 10,000 tons and below;

Small soda ash project of 40,000 tons and below;

Caustic soda project of 10,000 tons and below;

Production of tires, bands, contraceptives and other

rubber products that are beyond state designation;

Mining of chemical deposits without license;

Facilities for crude oil initial processing and

re-processing and general-use production-assisting

constructions with a capacity of less than 1,000,000

tons;

Ethylene project with a capacity of less than 100,000 tons.

Building Construction of cement kiln by indigenous methods, Materials mechanical cement kiln projectwith a productive capacity of 20,000 tons and below (except for special cement);

Mining of nonmetal deposit without license;

Four-machine kiln and lower class kiln for production of plate glass;

Fufa glass project with a productive capacity of 1,000,000 weight boxes and below.

4. Machinery and Electronics Industry

Machinery Techniques and facilities for production of easy-opening tins; 459 product items in 11 groups declared by the Machinery and Electronics Ministry to be restrained and eliminated;

Products whose development shall be restrained according to the List of the Machinery Industrial Products of

Group 1 and Group 2 Whose Development Is Proposed to Be

Controlled proclaimed by the former Machinery

Commission of the state.

Electronics Electronics products beyond state planning.

5. Automobile All kinds of automobiles and motor-cycles beyond planning Industry of the trade.6. Light Textile Industry

Light Industry Small leather plant (with a processing capacity of less

than 30,000 standard pieces);

Iron tins with design;

Weaved plastic bags;

Piano, organ and electronic organ;

Common imitation leather;

Metal easy-opening tin and beverage canned by

easy-opening tin;

Soft packing products made of compound paper and beverage;

Beverage packed in soft plastic box for use only once;

Household refrigerator, iced cupboard, washing machine, dust collector;

Electric fan, air conditioner and compressor;

Air-cooling-and-heating device, electric thermos;

Micro-wave oven, gas thermos;

Project of paper making through alkalization method with annual productive capacity of 10,000 tons and below;

Non-famous brand sewing machine, bicycles, electronic watch and mechanical watch;

Electric roasting oven, electric cooking oven, electromagnetic stove;

Mechanical typewriter;

Production of refrigerator compressor beyond state designation;

Black-white and colour film, photographic paper, zipper, toothpaste under the productive capacity of 3,000 boxes;

Fireworks and firecrackers.

Textile Woolen spinning under the capacity of 2,000 spindles;

Worsted spinning under the capacity of 5,000 spindles;

Cotton spinning under the capacity of 20,000 spindles;

Printing and dyeing without accompanying  pollution-control measures.

Tobacco Cigarette plants beyond state designation.

7. Miscellaneous Luxurious buildings without approval of competent authorities;